Career in banking sector has always been an evergreen choice among aspirants looking for a stable govt job with exponential growth. Despite an extensive and very tough screening process through IBPS examination system, every year thousands join this bandwagon to become part of the banking industry. One recurring question or dilemma, which any banking job aspirant encounters, has been the choice between a public sector bank job and a private sector bank job.
Both public sector and private sector banks have been great pillars on which the foundation of India’s economic development has been laid. Although, there is no major difference between the two when it comes to operations; there are certain key nuances that make job in a public sector bank like SBI much different from a job in private sector bank like HDFC or ICICI. Understanding the differences between public sector and private sector bank jobs beforehand, gives the aspirant a chance evaluate the job responsibilities involved and career growth path that each of these sectors have to offer. Read on to find out, which Banking sector job suits you the best!
1. Recruitment Process
Recruitment process is quite different for both these banking sectors. Public sector banks offer more recruitment opportunities compared to the private sector banks, because they follow rules and guidelines laid down by the government and the RBI for the recruitment process. Majority of PSU Banks hire through open competitive bank exams, for which notifications are advertised in newspapers and applications are invited from general public depending upon the eligibility criteria. They even follow the quota system for reserved category candidates as per the rules laid down by the government.
Generally, private Banks prefer to hire candidates through campus recruitments, referrals, through consultants and via walk-in interviews. However, with rising attrition rates and increasing vacancies, even private banks have started exam based hiring through public announcements via newspapers. Also, they do not have any strict reservation policy for hiring candidates.
2. Pay Scales and Salary difference
For a public sector bank, the pay scales and promotion strategy is already pre-decided at the organizational level. Generally, public sector banks have pay scale of 7200-19300 for Clerks and 14500-25700 for PO posts for entry level positions.
Private Banks, on the other hand have no such restrictions for pay scales and they can offer salary as per the qualifications and experience of person being hired. There is also a common belief that private sector banks prefer hiring people with professional degrees like MBA.
3. Training and Development
Public sector banks invest lot of time and money in training & development of bank employees. The main emphasis of employee training programme is to transform a recruit into a long time asset that will continue to serve the bank for a long time. Public sector banks are the perfect training ground for freshers.
Banks in private sector also focus upon training of the employees, however they prefer on-job training, where in recruits are deployed on the posts and are trained by their senior staff in the different aspects of their job responsibilities. Another advantage of private sector banks is that they send their high performing employees to professional training programmes like top management institutes to groom them for senior level positions in the bank.
4. Career Growth
This is probably the biggest and most important difference that aspirants should consider before deciding which banking sector they would like to join.
Because of structured organization and seniority based promotions strategy, the career growth in public sector banks is quite slow compared to private sector banks. This also affects the passion and intensity with which an employee works, because they already know they would be promoted to a certain position if they continue service for fixed number of years. However with rising competition, public sector banks have also started merit based promotions to retain talented employees.
On the other hand, private sector banks offer more opportunities of career growth based upon performance of an employee. Talent is rewarded well in private sector banks.
5. Job Security
Many aspirants choose a public sector bank job over private one because of the job security. Job security comes as part of the package in a public sector bank, where an employee is given enough time to understand and adjust to the job responsibilities and is helped to perform them well with help of frequent training programmes. An employee must commit a monumental mistake in order to be fired from a PSU bank.
Private sector banks are competitive business units and work on profit margins. Therefore, any lax in professional attitude or negligence towards your job responsibilities may cost an employee their job.
6. Work Culture
Public Sector Banks are public entities owned by the government; therefore they do not have to be extremely competitive in the market. They have fairly relaxed targets and more than enough resources to meet them. This makes the work culture at a public sector bank more relaxed and easy going. If you have ever visited a public sector bank you would have felt the same.
On the other hand, private sector banks operate on profit margins and therefore have high targets and tough deadlines to meet with limited resources. This means that every employee has to perform at their best in order to meet these targets. This makes the work culture at a private sector bank extremely aggressive.
7. Benefits and Perks
When it comes to benefits and perks, public sector surely has more to offer than the private sector banks. Public sector bank employees are entitled to numerous perks and benefits like pension scheme, lower interest rate on loans, higher interest rates for deposits and several more. Private Banks do not offer any such benefits or perks as part of their job package, but for talented employees are rewarded on basis of their performance.
This is probably the biggest deterrent for most of the aspirants planning to take up a job the public sector banks. Public sector banks have presence across country right from urban metro cities to remotest rural area. Therefore, public sector bank employee can be transferred at any location at any point in their career depending upon the requirements. On the other hand, private sector banks do not have fixed transfer policy and generally employees hired for a particular role in particular branch remain there during their entire tenure.
In conclusion, we can see that both public and private sector banks have their own sets of advantages and disadvantages. However, it is up to the aspirant to decide what kind of career they want for their future and make a choice.